Electricity deregulation

Few reruns could be more unwelcome than a rerun of deregulation. But if the governor and his representatives on the California Public Utilities Commission have anything to say about it, we'll all suffer through a remake of one of the worst chapters in our states' history. And we won't have any choice about it.

Back in 2001, when California was still reeling from rolling blackouts and market manipulation, a statute was passed that forbids a return to deregulation in the foreseeable future. In the past seven years, that law has helped California stabilize its electric market and focus on the important goals of conservation and renewable energy. But it is a thorn in the side of the big energy companies, who have the ear of the Governor and have re-branded their free market ideology with the pro-consumer sounding rubric "customer choice."

The first deregulation experiment also had choice as one of its selling points, but it turned out that few customers were interested in choosing their own electric company- less than 1% switched from their utility to an independent energy provider. The consumers who didn't switch made a good choice. After the feds finally put a stop to price gouging by the unregulated energy companies, most of them fled California, leaving their customers in the dark.

Consumers were not offered a choice when the CPUC imposed statewide rate hikes to cover prices that were manipulated sky-high by Enron, Reliant, Mirant and others. And when the utility companies cried broke due to the price gouging, consumers again had no choice. The CPUC decreed that the costs of utility bailouts should be added to their electric bills.

It is hard to believe that here in California, the poster child for everything that can possibly go wrong with deregulation, there could even be another debate on the subject. But the CPUC is unconvinced by history and undeterred by the law. The commission voted in February to reconsider deregulation (under yet another name, direct access), and seek ways around the legislative prohibition.
The timing for this end-run around the legislature could not be worse. With the economy in a nosedive and prices for other essentials skyrocketing, our state can ill afford another expensive experiment with our electric system. Nor can we afford the instability. Regulatory oversight has allowed California to become a nationally recognized leader in conservation and renewable energy, and progress is continuing. There is no reason to go backward, especially when what we've left behind is one of the most colossal failures in our history.

The big energy companies that are pushing for another shot at California would have us believe the failures of the first experiment were because of flawed laws and fixable mistakes. This time, they say, we will do it right. But a look at what has happened to deregulated electric rates in other states shows that California's experience with restructuring was not an anomaly.

Although many states backed away from deregulation in the wake of California's disaster, Texas, Maryland and a several others that didn't learn from our mistakes are in trouble. In those states and across the country, deregulated rates are tripling and quadrupling and state Legislatures are desperately seeking solutions. Consumers are angry, and are left wondering how their elected representatives could have made such a colossal mistake. Like consumers in California, they have little choice but to pay higher bills.

When anything as big and costly as electric deregulation is on the table, the very least the public can expect is accountability. In 2001, the California Legislature stepped in to stop the damage and shut the door on deregulation for the time being. There is no reason for the legislature to back down now, nor should they permit a change in direction without a vigorous public debate and a vote by elected lawmakers. The CPUC has neither the authority nor mandate to push its own agenda on California. If it tries to do so, consumers will have no choice but to fight back.